Casablanca – Morocco’s micro and small business sector experienced a sharp rise in bankruptcies in 2025, highlighting structural weaknesses in a segment that forms the backbone of the national economy. According to multiple reports from the Moroccan Confederation of Very Small, Small, and Medium Enterprises, approximately 52,000 companies exited the market last year, with micro-enterprises accounting for nearly 99% of these failures.

This surge comes despite the vital role these enterprises play in the economy. Collectively, micro, small, and medium businesses represent more than 98% of Morocco’s business landscape and provide around 83% of total employment. Their collapse, therefore, carries serious economic and social implications, particularly for employment and income stability across the country.

Fragility of the small business sector

Reports indicate that the small business sector has faced growing financial and administrative pressures in recent years. Limited access to bank financing, rising insolvency cases, and difficulties in rescheduling loans have compounded challenges for many micro and small enterprises. Participants in support programs such as “Intilaka” have been particularly affected, as many banks have refused to renegotiate loan terms.

The sector’s vulnerability was further exacerbated by the discontinuation of key government support programs like “Forsa” and “Intilaka,” which previously provided critical financial lifelines. Legal and administrative hurdles linked to these programs have intensified, creating additional pressure on entrepreneurs.

Tax burdens and policy gaps

Rising tax burdens have added to the sector’s financial strain. A planned increase in corporate tax for small companies from 10% to 20% threatens already thin profit margins, while social contribution deductions continue to strain liquidity.

The Confederation also highlighted the lack of implementation of a 2013 decree mandating that 20% of public contracts be allocated to micro, small, and medium enterprises. The absence of effective application of this policy has denied these businesses a vital source of revenue and market integration.

Moreover, the new investment charter imposes conditions that many small enterprises cannot meet, such as a minimum investment threshold of over  $103,000. This requirement has effectively excluded a large segment of micro and small businesses from government support and incentives, widening the gap between smaller enterprises and larger companies.

Consequences of payment delays

Delayed payments from large companies in both the public and private sectors have emerged as a critical factor in the financial deterioration of small enterprises. Late settlements exacerbate liquidity shortages, increase debt accumulation, and have been identified as a key driver of repeated bankruptcies.

Economic shocks such as the COVID-19 pandemic, droughts, and inflationary pressures have further intensified these difficulties. Small businesses also face administrative challenges, including cumbersome interactions with government agencies like the tax authority and social security fund, limiting their ability to navigate legal and financial systems efficiently.

Outlook for 2026

The outlook for 2026 remains uncertain. Reports warn that if current conditions persist, the rate of bankruptcies among small and micro-enterprises may continue to rise. The combination of financial strain, tax increases, exclusion from investment incentives, and delayed payments could lead to further instability in a sector that is critical for employment and economic growth.

Experts suggest that urgent policy interventions are necessary to stabilize the sector. Measures could include easing access to financing, reinstating support programs, revisiting the investment charter to accommodate smaller businesses, and enforcing existing policies that allocate public contracts to micro and small enterprises.

The situation underscores the importance of micro and small enterprises to Morocco’s economic fabric. With 98% of businesses and more than 80% of employment linked to this sector, supporting its stability is vital not only for economic growth but also for social stability and employment security.

Without decisive action, the crisis facing Morocco’s small business sector could escalate, with lasting repercussions for tens of thousands of workers and the broader economy.